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Abstract

In the current understanding of inter-firm alliances, firms form alliances when they need additional resources or when they have the opportunity to know and attract potential partners. Existing studies tend to focus on the general likelihood or rate of alliance formation of particular firms without regard for the particular projects for which alliances are formed. In this regard, there is a set of unexplored aspects of alliance formation for which existing theory cannot provide sufficient explanation. How do needs and opportunities for alliances emerge and interplay in the context of specific actions undertaken by firms? To address this question, we distinguish two types of uncertainty – project and actor – and argue that whereas project uncertainty increases the firm’s need to form alliances, actor uncertainty reduces its opportunity to do so. In addition, we distinguish between two types of quality signals – status and reputation – and argue that these matter differently in relation to project and actor uncertainty. We discuss the formation of syndication alliances in the VC industry and develop specific hypotheses for the interaction of uncertainty and quality signals in the context of VC syndication.